Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the adequacy of HMRC's communication policy on late filing penalties issued to self-employed people on incomes lower than the Personal Allowance; and whether HMRC is taking steps to reduce the number of such fines.

HMRC issues SA tax returns to customers when the information they hold suggests that the customer meets the published criteria for completing one. HMRC often cannot determine someone’s tax liability until they have sent in a tax return, therefore they need the return to establish whether there is tax due or not.

Even where a customer has no income, or does not owe tax they may still need to file a return e.g. to pay voluntary Class 2 National Insurance or to support claims for Maternity allowance or Tax Free Childcare.

HMRC charges late final penalties to encourage customers to file on time but they can cancel a customer’s late filing penalty if they have a reasonable excuse. Customers can also ask HMRC to remove them from the SA process for future years if they no longer meet the criteria.

HMRC is currently reforming late payment and late filing penalties. Their aim is to encourage those who persistently default to comply with their tax obligations rather than penalise those who make occasional errors.